Thailand's central bank hopes to help the country's beleaguered exporters by allowing more investment overseas part of a strategy to cheapen the Thai baht. Thailand market analysts doubt the plan will offer much respite from the global economic slump.

Thailand is suffering its most severe downturn in a decade. The Bank of Thailand reports industrial production fell for an eighth consecutive month in June.

The slide reflects falling global demand for automobiles and processed food, two of the country's biggest exports.

Exports, which account for about 60 percent of the economy, fell by more than 25 percent in June. Imports were also lower by 25 percent - a sign the local economy remains weak.

The Bank of Thailand warns the economy could contract more than four percent this year.

Thai industrialists want the central bank to help weaken the baht to make Thai exports cheaper on the international market.

This week the central bank said it would allow more companies to invest overseas, especially in foreign securities and bonds, as a way to weaken the baht. In theory, if companies sell the baht to buy investments overseas, that will reduce its value.

But Supavud Saicheua, an economist with stock brokerage Phatra Securities, says that may not help.

"Bottom line is we still have a large trade surplus," he said. "The trade surplus is derived from the fact that imports have not grown and imports have not grown because domestic demand has been relatively weak. And because you have a trade surplus it's very difficult for the baht to weaken."

The Thai auto sector has been hard hit by the downturn. Auto production in June was down more than 40 percent from a year ago, and exports of all vehicles, including motorbikes, have fallen more than 40 percent in value in the past year.

Vallop Tiasri, president of the Thailand Automotive Institute, is pessimistic about the central bank's plan.

"I don't think it's easy in this economic situation, in this economic crisis situation, to invest in another country," he noted. "That also makes me surprised that you can push the Thai company to bring the money to invest into another country, the weak or weaker economies.

But the government and economists say there are grounds for optimism. The government predicts the economy will begin to recover in the next few months.

Vikas Kawatra is a senior analyst with Kim Eng Securities. He says there are signs that Thai exporters are moving away from markets such as the United States, because of gains in some regional markets.

"Thailand does have a lot dependency on exports," he explained. "But of late it has been shifting its focus from the U.S. to other regional markets. So long as Asia keeps doing well, Thailand will not be as badly hurt and Asia could lead the recovery this time pretty much for the entire world."

The Asian Development Bank recently said it appears emerging East Asia economies already are moving toward recovery thanks to the government stimulus packages.